This article has been updated as per the GST Council’s decision to exempt transportation service provided by a GTA to unregistered persons.

Transport of goods by road is the most commonly used mode of transportation for businesses which supply goods. This transportation by road is facilitated either by a Goods Transport Agency (GTA) or common carriers such as autorickshaw or courier agencies. In this blog, we will understand what is meant by a Goods Transport Agency (GTA) and the GST rates for transportation service provided by a Goods Transport Agency. This is the first blog in the series wherein, we will understand the various tax provisions with respect to services provided by Goods Transport Agencies and the tax impact on persons taking their services.

Who is a GTA?

A GTA is basically any person who provides services in relation to transport of goods by road and issues a consignment note, commonly called as Lorry Receipt (LR). Hence, a person who provides the service of transportation of goods by road or any related service, such as loading, unloading, packing, unpacking, etc. can be considered as a GTA if the person issues a consignment note. Issuing of a consignment note or LR to the person taking the transportation service is integral for a person to be considered as a GTA. A copy of this consignment note will be sent to the consignee which gives the consignee the right to receive the goods from the GTA. The issue of a consignment note is what differentiates a GTA from a regular transporter. A regular transporter who can issue any document for the transportation service, except the consignment note.

A consignment note issued by a GTA should contain the following details:

Should be serially numbered

Names of the consignor and consignee

Registration number of the carriage used for transport of goods

Details of the goods transported

Place of origin and destination

Person liable for paying tax

GST on GTA services

The GST rates for transportation services provided by a GTA are given below:

Exempt

Transport of agricultural produce

Transport of milk, salt, food grains including rice, flour, pulses

Transport of organic manure

Transport of newspapers or magazines registered with the Registrar of Newspapers

Transport of relief materials for victims of natural or man-made disasters, calamities, accidents or mishaps

Transport of defence or military equipment

Transport of any goods, where the gross amount charged for transportation for a consignment transported in a single carriage is less than Rs. 1,500

For example: Raj Logistics, a GTA, provides transportation services to Manish Apparels, a registered dealer. On 15th September, 2017, Manish Apparels sends a batch of apparel to a dealer, Rakesh Designs. Raj Logistics transports the batch of apparel in a single vehicle and they charge Rs. 1,000 as freight for this.

Here, the batch of apparel is transported in a single vehicle and the value of transportation charges charged by Raj Logistics does not exceed Rs. 1,500. Hence, no tax is payable on the transportation service.

Transport of any goods, where the gross amount charged for transportation of goods for a single consignee is less than Rs. 750

For example: Raj Logistics transports a batch of apparel on behalf of Manish Apparels to Rakesh Designs. It is transported in 2 different vehicles along with other goods. Raj Logistics charge Rs. 700 as freight for this.

Here, the batch of apparel is transported in 2 different vehicles but to the same consignee, that is, Rakesh designs, and the value of transportation charges charged by Raj Logistics does not exceed Rs. 750. Hence, no tax is payable on the transportation service

5%

Transportation of goods other than the above

For example: Raj Logistics transports a batch of apparel on behalf of Manish Apparels to Rakesh Designs. The batch is transported in a single vehicle and Raj Logistics charges Rs. 2,000 as freight for this.

Here, the batch of apparel is transported in a single vehicle and the value of transportation charges charged by Raj Transports exceeds Rs. 1,500. Hence, tax @ 5% is payable on the transportation service.

Note that with effect from 13th October, ’17, transportation service provided by a GTA to an unregistered person is exempt from GST.

Now that we have understood who a GTA is and the GST rates for transportation service taken from a GTA, in the next blog, we will learn who will be liable to pay tax: is it the GTA or the service receiver.

Transportation Charges paid to Unregistered Transporter from Outside of the Gujarat State e.g Delhi than which type of GST Applicable under RCM?Is it Interstate Taxable as IGST? or Is it Purchased from URD-Taxable as CGST / SGST as per the destination based Tax / Consumption based tax ?

Sir i am reg dealer maharashtra purchase & load goods from punjab by truck owner in punjab & send it to party in assam,sir what is place of supply &i have to pay igst or Sgst&cgst plz guide.Is answer change in case truck owner is from Delhi or maharashtra?

1. If i purchase stationery like pen, pencil and register, all these items are having diffrent hsn code and diffrent tax rate but falls under stationery head. And stationery is our indirect expense. how to entry the same in single entry with diffent hsn code in tally2. All per govt our tax invoice should mention “is reverse charge applicable?” But in tally tax invoice in not mentiong this line3. It is compulory to charge rcm on freight above 1500 and for others is 5000 but as per tally we can only set rcm on 5000.plz guide4. As per govt rule we have to raise payment voucher for making payment to rcm party.. but there seems no provision in tally like this

Thanks for this update. Very informative. Most of our suppliers (Sellers of Electrical Fittings & Plumbing Fitting & Tiles & Other materials) blindly charge GST 18% for the freight amount (which is always below Rs.1500/-) when they transport materials from the purchased shop to the project site through Auto Rickshaw or other smaller vehicles. They simply charge freight amount and GST 18% in their sales Invoices. They don’t issue any consignment note as these freight charges are very smaller one like 450/- and 250/-. Is it correct?In case if they continue to do so, Could I claim that ITC?

Please note that in this case there are two transactions are involved. 1st you are receiving transportation services and 2nd you are adding the same in your invoice.

As discussed and we understand the matters above, there is no GST at the time you received transportation service as it’s below Rs. 750/1500 As the case may be. However when you add the freight charges in your invoice will become a mixed or composite supply. In such a case it will be charged at the rate you supply your goods.